STUDY OF CAPITALISATION OF MUTUAL FUNDS IN INDIAN MARKET

A RESEARCH POJECT REPORT Submitted to Mahamaya Technical University, Noida in partial fulfillment of the requirement of Master of Business Administration In (Finance)

Submitted By: Aditya Chaturvedi Roll no: 1122570004 MBA Batch (2011-13) Accurate Institute of Management & Technology

SUPERVISORS CERTIFICATE

This is to certify that the Research Project Report titled

STUDY OF CAPITALISATION OF MUTUAL FUNDS IN INDIAN MARKET is an original work carried out by Mr. Aditya

Chaturvedi under my supervision, in the partial fulfillment of the requirement for the award of MBA degree by the Mahamaya Technical University, Noida.

This is to further certify, to the best of my knowledge, that this work was neither published nor submitted to any other institution for award of any other degree or diploma.

Signature Dr. Vikas Garg Designation: Asst. Prof. Date:

HEAD OF MBA PROGRAMS CERTIFICATE

This is to certify that the Research Project titled

STUDY OF CAPITALISATION OF MUTUAL FUNDS IN INDIAN MARKET is carried out by Mr. Aditya chaturvedi, a student of

MBA IV semester at Accurate Institute of Management & Technology, Greater Noida, under the supervision of Dr. Vikas Garg Asst. Prof.

This is an original work carried out by the said student to the best of my knowledge and I recommend for the submission of this Research Project report to Mahamaya Technical University, Noida in the partial fulfillment of the requirement for the award of MBA degree.

Prof. (Dr) Amar Saxena (Dean MBA) AIMT, Greater Noida Date:

STUDENTS DECLARATION

I hereby declare that the survey, data collection and analysis work related to Research Project report titled STUDY OF CAPITALISATION OF MUTUAL FUNDS IN INDIAN MARKET has been carried out exclusively on my efforts under the guidance of Dr. Vikas Garg. I, further declare that this work was neither published nor submitted to any other institution for award of any other degree or diploma.

Aditya Chaturvedi Roll no. 1122570004 Accurate Institute of Management & Technology, Greater Noida Day/month/year

PREFACE

MBA is a stepping-stone to the management carrier and to developgood manager it is necessary that the theoretical must besupplemented with exposure to the real environment. Theoreticalknowledge just provides the base and its not sufficient to produce a goodmanager thats why practical knowledge is needed. Therefore the researchproduct is an essential requirement for the student of MBA. This researchproject not only helps the student to utilize his skills properly learn fieldrealities but also provides a chance to the organization to find out talent amongthe budding managers in the very beginning. In accordance with the requirement of MBA course I have research project on the topic Study of Capitalization of Mutual Funds in Indian Market . The main objective ofthe research project was to study the two instruments and make a detailedcomparison of the two.

For conducting the research project sample size of 50 customers of BajajCapital was selected. The information regarding the project research wascollected through the questionnaire formed by me which was filled by thecustomers there.

In the growing global competition, business has taken a new shape in the world. Todays Manager has to understand the uncertainty of business environment to cope with the situation. Dissertation for each and every student of MBA is an essential part of completion at the end of 1st year of the course. The prime objective of this summer training to familiar with real life business environment and apply the theoretical concept of business into reality and know how much theory is applicable in day to day business activity. It also sharpens their knowledge, hones their analytical and other businessacumen and develops

better appreciation of the practical problems of business,especially from the management point of view.

Moreover the experience acquired by student helps to decide the future professional career. As per the module is concern I underwent in a project entitled Market Capitalisation of Mutual Fund & ULIP.

ACKNOWLEDGEMENTS

Successful project is fruitful culmination of efforts of many people, somedirectly involved, and others who have quietly encouraged and extendedtheir support, while being in the background. I take this opportunity toextend my deep sense of gratitude and heartfelt thanks to all those who havehelped us directly or indirectly during the course of my project.

My colleagues and associates at ACCURATE INSTITUTE OF MANAGEMENT & TECHNOLOGY continue to have important impact on my thinking. This dissertation could not have been written without Dr.Vikas Garg who not only served as my supervisor but also encouraged and challenged me throughout my academic program who patiently guided me through the dissertation process, never accepting less than my best efforts. I am also appreciative of all that I have learnedfrom working with industry executives who have generously shared their insightand experiences. I would like to give thanks to all the staff of Bajaj capital. New Delhi for their valuable and sincere cooperation and plying all the database of Bajaj capital, New Delhi. I am thankful to my parents, & my entire familywho are always my source of brainchild & unplumbed exertion towards thejourney of my life.

At last but not the least I am grateful to Omnipotent God for his manifold blessingin this endeavor of mine.

Aditya Chaturvedi

EXECUTIVE SUMMARY
In todays corporate and competitive world, I find that insurance 7 MutualFund sector has the maximum growth and potential as compared to theother sectors. Insurance has the maximum growth rate of 70-80% while asFMCG sector has maximum 12-15% of growth rate. This growth potential attractsme to enter in this sector and Bajaj Capital has given me the opportunity to workand get experience in highly competitive and enhancing sector.maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and Bajaj Capital has given me the opportunity to work and get experience in highly competitive and enhancing sector.

My project was to understand the different marketing strategies adopted by thecompany, namely, Bajaj Capital to increase their market share and also to achieveits own target in order to attain the zenith of its respective sector.

My SIP has helped me in learning a lot of things about the corporate world. As aproject trainee I was required to understand the behavior of the consumer in orderto manipulate the market and gain an advantage in the competitive scenario.

I also learned to develop the agency channel and how to create businessopportunities. This helped me to know the issues of the competitive market andalso helped me enhance my communication and convincing skills.

Understanding the ground reality of marketing is like stars in the eyes of every Management Professional,& this experience becomes more profound when theinception is with a pioneer like Bajaj Capital. During the two months SummerProject with Bajaj Capital had a very nice Corporate World Exposure, which Ithink will serve as a stepping stone for me in my corporate journey. In todays corporate and competitive world, I find that insurance 7 Mutual Fund sector has the maximum growth and potential as compared to the other sectors.Insurance has the maximum growth rate of 70-80% while as FMCG sector hasmaximum 12-15% of growth

rate. This growth potential attracts me to enter in thissector and Bajaj Capital has given me the opportunity to work and get experiencein highly competitive and enhancing sector.

Unit Links Insurance Plan (ULIP) and Mutual Fund (MF) are the two mostpreferred options for a part time investor to invest into equity. But how do wedecide which one should we go for. Though it is very easy to decide, people tend toconfuse themselves most of the time. This Report talks about some points that youneed to consider while deciding which option we want to take. Mutual Fund ispure investments. ULIP are combination of Insurance and Investment.

Table Of Content NAME OF TITLE CHAPTOR 1 ;- INTRODUCTION INDUSTY PROFILE ULIP INVESTORS CHAPTOR 2 :- COMPANY PROFILE CHAPTOR 3 :- RESEARCH METHODOLOGY CHAPTOR 4:- ANALYSIS AND INTERPRETATION CHAPTOR 5:- FINDING AND RECOMMENDATIONS CONCLUSION BIBLIOGRAPHY APPENDEX PAGE NO. 01 11 22 35 47 58 62 81 84 86 89

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Market Capitalization of Mutual Fund and ULIPs Chapter-01

Mutual Fund

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INTRODUCTION
A Mutual Fund is a collective investment vehicle formed with the specific objective ofraising money from a large number of Individuals and investing it according to aprespecified objective. The word Mutual in a Mutual Fund signifies a vehicle wherein thebenefits of Investment accrued pro rata to all the investors in proportion to there Investments. Over the past decades Mutual Funds have grown intensely in popularity and have experienced aconsiderable growth rate. Mutual Funds are popular because they make it easy for smallinvestors to invest their money in a diversified pool of securities. As the Mutual Fund industryhas evolved over the years.

MEANING:
Mutual Fund is a trust that pools the savings of a number of investors who share a commonfinancial goal. Anyone with an invisible surplus of as little as few thousand rupees can invest inMutual Funds. These investors buy units of a particular Mutual Fund scheme that has a definedinvestment objective and strategy.

The fund manager in different types of securities then invests the money thus collected. Thesecould range from shares to debentures to money market instruments, depending on the schemesstated objectives. The income earned through these investments and the capital appreciationsrealized by the scheme are shared by its unit holders in proportion of the number of units ownedby them. Thus a Mutual Fund is the most suitable investment for the common man as it offers anopportune investing a diversified, professionally managed basket of securities at a relatively lowcost. A Mutual Fund is the ideal investment vehicle for todays complex modern world. It appointsprofessionally qualified and experienced staff that manages each of these functions on full timebasis. The large pool of money collected in the fund allows it to hire such staff at a very low costto each investor. In effect, the Mutual Fund vehicle exploits economies of scale in all three areas research, investing and transaction processing.

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While the concept of individuals coming together to invest money collectively is not new, theMutual Fund in its present form is a 20th century phenomenon. In fact, Mutual Funds gainedpopularity only after the Second World War. Globally, there are thousandof firms offerings tensof thousand of Mutual Funds with different investment objectives. Today Mutual Fundscollectively manage almost as much money as banks.

Along with the success of Mutual Funds, inevitably there arose a need to regulate the industry.Thus regulation and regulatory bodies came into being so that small investors were not misled orput to loss by some unscrupulous people representing themselves as Mutual Funds.

Characteristics of Mutual Funds:

The ownership is in the hands of the investors who have pooled in their funds. It is managed by a team of investment professionals and other service providers. The pool of funds is invested in a portfolio of marketable investments. The investors share is denominated by units whose value is called as Net Asset Value(NAV) which changes everyday. The investment portfolio is created according to the stated investment objectives of thefund.

ADVANTAGES OF MUTUAL FUNDS:

The advantages of Mutual Funds are given below: Portfolio Diversification Mutual Funds invest in a number of companies. This diversification reduces the risk because ithappens very rarely that all the stocks decline at the same time and in the same proportion. Sothis is the main advantage of Mutual Funds. Professional Management Mutual Funds provide the services of experienced and skilled professionals, assisted by investment research team that analysis the performance and prospects of companies and selectthe suitable investments to achieve the objectives of the scheme. Low Costs Mutual Funds are a relatively less expensive way to invest as compare to directly investing in acapital markets because of less amount of brokerage and other fees.

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 Liquidity This is the main advantage of Mutual Fund, which is whenever investor needs money he caneasily get redemption, which is not possible in most of other options of investment. In openendedschemes of Mutual Fund, the investor gets the money back at net asset value and on theother hand in close-ended schemes the units can be sold in a stock exchange at a prevailingmarket price. Transparency In Mutual Fund, investors get full information of the value of their investment, the proportion ofmoney invested in each class of assets and the fund managers investment strategy Flexibility Flexibility is also the main advantage of Mutual Fund. Through this investors can systematicallyinvest or withdraw funds according to their needs and convenience like regular investment plans,regular withdrawal plans, and dividend reinvestment plans etc. Convenient Administration Investing in a Mutual Fund reduces paperwork and helps investors to avoid many problems likebad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds savetime and make investing easy. Affordability Investors individually may lack sufficient funds to invest in high-grade stocks. A Mutual Fundbecause of its large corpus allows even a small investor to take the benefit of its investmentstrategy. Well Regulated All Mutual Funds are registered with SEBI and they function with in the provisions of strict regulations designed to protect the interest of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Disadvantages of Mutual Funds:

Mutual Funds have their following drawbacks: No Guarantees No investment is risk free. If the entire stock market declines in value, the value of Mutual Fundshares will go down as well, no matter how balanced the portfolio. Investors encounter

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fewerrisks when they invest in Mutual Funds than when they buy and sell stocks on their own.However, anyone who invests through Mutual Fund runs the risk of losing the money. Fees and Commissions All funds charge administrative fees to cover their day to day expenses. Some funds also chargesales commissions or loads to compensate brokers, financial consultants, or financial planners.Even if you dont use a broker or other financial advisor, you will pay a sales commission if youbuy shares in a Load Fund. Taxes During a typical year, most actively managed Mutual Funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes profit on its sales, you will pay taxes on the income you receive; even you reinvest the money you made. Management Risk When you invest in Mutual Fund, you depend on fund manager to make the right decisions regarding the funds portfolio. If the manager does not perform well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest inindex funds, you forego management risk because these funds do not employ managers.

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Types of Mutual Fund Schemes:

In India, there are many companies, both public and private that are engaged in the trading of Mutual Funds. Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return expectations etc. Investment can be made either inthe debt Securities or equity .The table below gives an overview into the existing types of schemes in the Industry.

Generally two options are available for every scheme regarding dividend payout and growth option. By opting for growth option an investor can have the benefit of long-term growth in thestock market on the other side by opting for the dividend option an investor can maintain hisliquidity by receiving dividend time to time. Some time people refer dividend option as dividendfund and growth fund. Generally decisions regarding declaration of the dividend depend uponthe performance of stock market and performance of the fund.

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Systematic Investment Plan (SIP):

Systematic investment plan is like Recurring Deposit in which investor invests in the particularscheme on regular intervals. In the case it is convenient for salaried class and middle-incomegroup. In this case on regular interval units of specified amount is created. An investor can makepayment by regular payments by issuing cheques, post dated cheques, ECS, standing Mandateetc. SIP can be started in the any open-ended fund if there is provision of it. There are some entryand exit load barriers for discontinuation and redemption of the fund before the said period.

According to Structure:
Open Ended Funds: An open ended fund is one that is available for subscription all through the year. These do nothave a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV)related prices. The key feature of open ended schemes is liquidity. Close Ended Funds: A close ended fund has a stipulated maturity period which generally ranging from 3 to 15years. The fund is open for subscription only during a specified period. Investors can investin the scheme at the same time of the initial public issue and thereafter they can buy

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and sell theunits of the scheme on the stock exchanges where they are listed. In order to provide an exitroute to the investors, some close ended funds give an option of selling back the units to theMutual Fund through periodic repurchase at NAV related prices.

Interval Funds: Interval funds combine the features of open ended and close ended schemes. They are openfor sales or redemption during pre-determined intervals at their NAV.

According to Investment Objective:

Growth Funds: The aim of growth funds is to provide capital appreciation over the medium to long term. Suchschemes normally invest a majority of their corpus in equities. It has been proven that returns from stocks are much better than the other investments had over the long term. Growth schemesare ideal for investors having a long term outlook seeking growth over a period of time.

Income Funds: The aim of the income funds is to provide regular and steady income to investors. Such schemesgenerally invest in fixed income securities such as bonds, corporate debentures and governmentsecurities. Income funds are ideal for capital stability and regular income.

Balanced Funds: The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAVof these schemes may not normally keep pace or fall equally when the market falls. These areideal for investors looking for a combination of income and moderate growth.

Money Market Funds: The main aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safe short term instruments such as treasurybills, certificates of deposit, commercial paper and inter bank call money.

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Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for corporate and individual investors as a means to park their surplus funds for short periods. Other Schemes:

Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Indian IncomeTax laws as the government offers tax incentives for investment in specified avenues. Investments made inequity Linked Saving Schemes (ELSS) and Pension Schemes are allowed asdeduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investorsto save capital gains.

Special Schemes:

Index Schemes: Index funds attempt to replicate the performance of a particular index such as the BSE Sensex orthe NSE 50.

Sector Specific Schemes: Sector funds are those which invest exclusively in a specified industry or a group of industries orvarious segments such as A group shares or initial public offerings.

Bond Schemes: It seeks investment in bonds, debentures and debt related instrument to generate regular incomeflow.

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Industry Profile:
The Mutual Fund industry is a lot like the film star of the finance business. Though it is perhapsthe smallest segment of the industry, it is also the most glamorous in that it is a young industrywhere there are changes in the rules of the game everyday, and there are constant shifts andupheavals. The Mutual Fund is structured around a fairly simple concept, the mitigation of riskthrough the spreading of investments across multiple entities, which is achieved by the poolingof a number of small investments into a large bucket. Yet it has been the subject of perhaps themost elaborate and prolonged regulatory effort in the history of the country.

A little history:
The Mutual Fund industry started in India in a small way with the UTI Act creating what waseffectively a small savings division within the RBI. Over a period of 25 years this grew fairlysuccessfully and gave investors a good return, and therefore in 1989, as the next logical step,public sector banks and financial institutions were allowed to float Mutual Funds and theirsuccess emboldened the government to allow the private sector to foray into this area. The initial years of the industry also saw the emerging years of the Indian equity market, when anumber of mistakes were made and hence the Mutual Fund schemes, which invested in lesserknownstocks and at very high levels, became loss leaders for retail investors. From those days totoday the retail investor, for whom the Mutual Fund is actually intended, has not yet returned tothe industry in a big way. But to be fair, the industry too has focused on brining in the largeinvestor, so that it can create a significant base corpus, which can make the retail investor feelmore secure.

The Indian Mutual Fund industry has Rs 5.67 lakh crores of Assets Under Management(AUM). As per data released by Association of Mutual Funds in India, the asset base of allMutual Fund combined has risen by 7.32% in April, the first month of the current fiscal. As ofnow, there are 33 fund houses in the country including 16 joint ventures and 3 wholly ownedforeign asset managers. According to a recent McKinsey report, the total AUM of the Indian Mutual Fund industry couldgrow to $350-440 billion by 2012, expanding 33% annually. While the revenue

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and profit (PAT)pools of Indian AMCs are pegged at $542 million and $220 million respectively, it is at par withfund houses in developed economies. Operating profits for AMCs in India, as a percentage ofaverage assets under management, were at 32 basis points in 2006-07, while the number was 12bps in UK, 17 bps in Germany and 18 bps in the US, in the same time frame.

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Major Players in Indian Mutual Fund Industry and Their AUM

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History of Mutual Fund:

The Mutual Fund industry in India started in 1963 with the formation of Unit Trust of India(UTI), at the initiative of the Government of India and Reserve Bank. The history of MutualFunds in India can be broadly divided into four distinct phases: First Phase 1964-87 An Act of Parliament established Unit Trust of India (UTI) on 1963. It was setup by the ReserveBank of India and functioned under the Regulatory and administrative control of the ReserveBank of India. In 1978 UTI was delinked from the RBI and the Industrial Development Bank ofIndia (IDBI) took over the regulatory and administrative control in place of RBI. The firstscheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI hadRs.6, 700 crores ofassets under management. Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector Mutual Funds set up by public sector banksand Life Insurance Corporation of India (LIC) and General Insurance Corporation of India(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followedby Can bank Mutual Fund(Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian BankMutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).LICestablished its Mutual Fund in June 1989 while GIC had set up its Mutual Fund in December1990.At the end of 1993, the Mutual Fund industry had assets under management of Rs.47,004crores. Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian Mutual Fundindustry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year inwhich the first Mutual Fund Regulations came into being, under which all Mutual Funds, exceptUTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged withFranklin Templeton) was the first private sector Mutual Fund registered in July 1993.

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Fourth Phase since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963UTIwas bifurcatedinto two separate entities. One is the Specified Undertaking of the Unit Trust of India with assetsunder management ofRs.29, 835 crores as at the end of January 2003, representing broadly, theassets of US 64scheme, assured return and certain other schemes. The Specified Undertaking ofUnit Trust of India, functioning under an administrator and under the rules framed byGovernment of India and does not come under the purview of the Mutual Fund Regulations. Thesecond is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered withSEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhileUTI which had in March2000 more thanRs.76,000 crores of assets under management and withthe setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, andwith recent mergers taking place among different private sector funds, the Mutual Fund industryhas entered its current phase of consolidation and growth. As at the end of September, 2004,there were 29funds, which manage assets of Rs.153108 crores under 421 schemes.

Analysis:
First Phase 1964-87(UTI was the Only Player) Second Phase 1987-1993 (Entry of Public Sector Funds): Third Phase 1993-2003 (Entry of Private Sector Funds):

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 Fourth Phase Since February 2003.

Overview of Mutual Fund Industry:

Over the past decades Mutual Funds have grown intensely in popularity and have experienced aconsiderable growth rate. The graph indicates the growth of assets over the years.

Growth in Assets under Management:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the UnitTrust of India effective from February 2003. The Assets under management of the SpecifiedUndertaking of theUnit Trust of India has therefore been excluded from the total assets of the industry as a wholefrom February 2003 onwards.

This is how a Mutual Fund going on. it is also called as the life cycle of Mutual Fund.

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This is the way how Mutual Fund works. Its starts from investor and it also end with investor. Soinvestor plays a vital role in Mutual Fund. Its all about Mutual Fund. Now we are going todiscuss about the Reliance Mutual Fund (RMF) in detail.

Economic Environment:
While the Indian Mutual Fund industry has grown in size by about 320% from March, 1993 (Rs.470 billion) to December, 2004 (Rs. 1505 billion) in terms of AUM, the AUM of the sectorexcluding UTI has grown over 8 times from Rs.152 billion in March 1999 to $ 148 billion as atMarch 2008.

Though India is a minor player in the global Mutual Fund industry, its AUM as proportion of theglobal AUM has steadily increased and has doubled over its levels in 1999.The growth rate ofIndian Mutual Fund industry has been increasing for the last few years. It was approximately0.12% in the year of 1999 and it is noticed 0.25% in 2004 in terms of AUM as percentage ofglobal AUM.

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Some facts for the growth of Mutual Funds in India: 100% growth in the last 6 years. Number of foreign AMCs is in the queue to enter the Indian markets. Our saving rate is over 23%, highest in the world. Only channelizing these savings in Mutual Funds sector is required. We have approximately 29 Mutual Funds which are much less than US having more than800. There is a big scope for expansion. Mutual Fund can penetrate rural like the Indian insurance industry with simple and limitedproducts. SEBI allowing the MF's to launch commodity Mutual Funds. Emphasis on better corporate governance. Trying to curb the late trading practices. Introduction of Financial Planners who can provide need based advice.

Recent trends in Mutual Fund industry:

The most important trend in the Mutual Fund industry is the aggressive expansion of the foreignowned Mutual Fund companies and the decline of the companies floated by the nationalizedbanks and smaller private sector players. Many nationalized banks got into the Mutual Fundbusiness in the early nineties and got off to a start due to the stock market boom were prevailing.These banks did not really understand the Mutual Fund business and they just viewed it asanother kind of banking activity. Few hired specialized staff and generally chose to transfer stafffrom the parent organizations. The performance of most of the schemes floated by these fundswas not good. Some schemes had offered guaranteed returns and their parent organizations hadto bail out these AMCs by paying large amounts of money as a difference between theguaranteed and actual returns. The service levels were also very bad. Most of these AMCs havenot been able to retain staff, float new schemes etc.

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Members of AMFI:
Bank Sponsored 1. Joint Ventures - Predominantly Indian 1. CanaraRobeco Asset Management Company Limited 2. SBI Funds Management Private Limited

2. Others 1. Baroda Pioneer Asset Management Company Limited 2. UTI Asset Management Company Ltd

Institutions 1. LIC Mutual Fund Asset Management Company Limited Private Sector

1. Indian 1. Benchmark Asset Management Company Pvt. Ltd. 2. DBS Cholamandalam Asset Management Ltd. 3. Deutsche Asset Management (India) Pvt. Ltd. 4. Edelweiss Asset Management Limited 5. Escorts Asset Management Limited 6. IDFC Asset Management Company Private Limited 7. JM Financial Asset Management Private Limited 8. Kotak Mahindra Asset Management Company Limited (KMAMCL) 9. Quantum Asset Management Co. Private Ltd. 10. Reliance Capital Asset Management Ltd. 11. Sahara Asset Management Company Private Limited 12. Tata Asset Management Limited 13. Taurus Asset Management Company Limited

2. Foreign 1. AIG Global Asset Management Company (India) Pvt. Ltd. 2. FIL Fund Management Private Limited

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3. Franklin Templeton Asset Management (India) Private Limited 4. Mirae Asset Global Investment Management (India) Pvt. Ltd.

3. Joint Ventures - Predominantly Indian 1. Birla Sun Life Asset Management Company Limited 2. DSP Merrill Lynch Fund Managers Limited 3. HDFC Asset Management Company Limited 4. ICICI Prudential Asset Management Company Limited 5. Sundaram BNP Paribas Asset Management CompanyLimited

4. Joint Ventures - Predominantly Foreign 1. ABN AMRO Asset Management (India) Pvt. Ltd. 2. Bharti AXA Investment Managers Pvt. Ltd 3. HSBC Asset Management (India) Private Ltd. 4. ING Investment Management (India) Pvt. Ltd. 5. JPMorgan Asset Management India Pvt. Ltd. 6. Lotus India Asset Management Co. Pvt. Ltd. 7. Morgan Stanley Investment Management Pvt. Ltd. 8. Principal PNB Asset Management Co. Pvt. Ltd.

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Frequently Used Terms:

Advisor - Is employed by a Mutual Fund organization to give professional advice on the fundsinvestments and to supervise the management of its asset. Diversification The policy of spreading investments among range of different securities to reduce the risk.Net Asset Value (NAV) - Net Asset Value is the market value of the assets of the schememinus its liabilities. The per unit NAV is the net asset value of the scheme divided by the numberof units outstanding on the Valuation Date.

Sales Price - Is the price you pay when you invest in a scheme. Also called Offer price. It mayinclude a sales load.

Repurchase Price - Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.

Redemption Price - Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. Sales Load - Is a charge collected by a scheme when it sells the units. Also called Frontendload. Schemes that do not charge a load are called No Load schemes. Repurchase or Back-end Load Is a charge collected by a scheme when it buys back the units from the unit holders.

Dividend Policy: Dividend will be distributed from the available distributable surplus after the deduction of the divided distribution surplus after the deduction of the dividend distribution tax and the applicablesurcharge, if any. The Mutual Fund is not guaranteeing or assuring any dividend.

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ULIP(UNIT LINKED INSURANCE Policy)

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Introduction:
World over, insurance come in different forms and shapes.although the generic names may find similar, the difference in product features makes one wonderabout the basis on which these products are designed .With insurance marketopened up, Indian customer has suddenly found himself in market place where he is bombardedwith a lot of jargon as well as marketing gimmicks with a very little knowledge of what ishappening. This module is aimed at clarifying these underlying concepts and simplifying thedifferent products available in the market. Current Market Share of Private Insurance Companies in India:

We have many products like Endowment, Whole life, Money back etc. All these products are based on following basic platforms or structures viz:

Traditional Life Insurance Universal Life or Unit Linked Insurance Policy.

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Traditional Life An Overview:

The basic and widely used form of design is known as Traditional Life Platform. It is based onthe concept of sharing. Each of the policy holder contributes his contribution (premium) into thecommon large fund is managed by the company on behalf of the policy holders. Administration of that common fund in the interest of everybody was entrusted to the insurancecompany .It was the responsibility of the company to administer schemes for benefit of thepolicyholders. Policyholders played a very passive roll. In the course of time, the same conceptof sharing and a common fund was extended to different areas like saving, investment etc.

Features of Traditional Life:

This is the simplest way of designing product as far as concerned. He has no otherresponsibility but to pay the premium regularly. Company is responsible for the protection as well as maximization of the policyholdersfunds. There is a common fund where in all the premiums paid are accumulated. Expenses incurredas well as claim paid are then taken out of this fund. Companies carry out the valuation of the fund periodically to ascertain the position. It is also apractice to increase the minimum possible guarantee under a policy every year in the form ofdeclaring and attaching bonuses to the sum assured on the basis of this valuation.

Declaration of bonuses is not mandatory. Based on the end objective, companies may offer different plans like saving plans, investmentplans etc.(e.g. Endowment , SPWLIP)

It helps to maintain a smooth growth and protects against the vagaries of the market. In otherwords it minimizes the risk of investments for an average individual. He shares his risk with agroup of like-minded individuals.

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Universal Life or Unit Linked Insurance Policy:

ULIP is the Product Innovation of the conventional Insurance product. With the decline in thepopularity of traditional Insurance products & changing Investor needs in terms of lifeprotection, periodicity, returns& liquidity, it was need of the hour to have an Instrument thatoffers all these features bundled into one.

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Meaning:
A Unit Link Insurance Policy (ULIP) is one in which the customer is provided with a lifeinsurance cover and the premium paid is invested in either debt or equity products or a combination of the two. In other words, it enables the buyer to secure some protection for his family in the event of his untimely death and at the same time provides him an opportunity to earn a return on his premium paid. In the event of the insured person's untimely death, his nominees would normally receive an amount that is the higher of the sum assured or the value ofthe units (investments).

To put it simply, ULIP attempts to fulfill investment needs of investor with protection/insuranceneeds of an insurance seeker. It saves the investor/insurance-seeker the hassles of managing andtracking a portfolio or products. More importantly ULIPs offer investors the opportunity to selecta product which matches their risk profile.

Unit Linked Insurance Plans came into play in the 1960s and became very popular in WesternEurope and Americas. In India The first unit linked Insurance Plan , popularly known as ULIP Unit Linked Insurance Plan in India was brought out by Unit Trust Of India in the year 1971 byentering into a group insurance arrangement with LIC o provide for life cover to the investors,while UTI , as a mutual was taking care of investing the unit holders money in the capital marketand giving them a fair return .

Subsequently in the year 1989, another Unit Linked Product was launched by the LIC MutualFund called by the name of DHANARAKSHA which was more or less on the line of ULIP ofUTI. Thereafter LIC itself came out with a Unit Linked Insurance Product known by nameBIMA PLUS in the year2001-02.

Presently a number of private life insurance companies have launched Unit Linked InsuranceProducts with a variety of new features.

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ULIP - Key Features:

Premiums paid can be single, regular or variable. The payment period too can be regularor variable. The risk cover can be increased or decreased. As in all insurance policies, the risk charge (mortality rate) varies with age. The maturity benefit is not typically a fixed amount and the maturity period can beadvanced or extended. Investments can be made in gilt funds, balanced funds, money market funds, growthfunds or bonds. The policyholder can switch between schemes, for instance, balanced to debt or gilt toequity, etc. The maturity benefit is the net asset value of the units. The costs in ULIP are higher because there is a life insurance component in it as well, inaddition to the investment component. Insurance companies have the discretion to decide on their investment portfolios. Being transparent the policyholder gets the entire episode on the performance of his fund. ULIP products are exempted from tax and they provide life insurance. Provides capital appreciation. Investor gets an option to choose among debt, balanced and equity funds

Functions of ULIP:

ULIPs work on the lines of Mutual Funds. The premium paid by the client (less any charge)is used to buy units in various funds (aggressive, balanced or conservative) floated by theinsurance companies.

Units are bought according to the plan chosen by the policyholder. On every additionalpremium, more units are allotted to his fund. The policyholder can also switch among the funds as and when he desires. While somecompanies allow any number of free switches to the policyholder, some restrict the numberto just three or four. If the number is exceeded, a certain charge is levied.

Individuals can also make additional investments (besides premium) from time to time toincrease the savings component in their plan. This facility is termed "top-up".

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The money parked in a ULIP plan is returned either on the insureds death or in the event ofmaturity of the policy. In case of the insured persons untimely death, the amount that the beneficiary is paid is thehigher of the sum assured (insurance cover) or the value of the units (investments).However,some schemes pay the sum assured plus the prevailing value of the investments.

Types of Funds do ULIP Offers: Most insurers offer a wide range of funds to suit ones investment objectives, risk profile andtime horizons. Different funds have different risk profiles. The potential for returns also variesfrom fund to fund.

The following are some of the common types of funds available along with an indication of theirrisk characteristics.

There are various unit linked insurance plans available in the market. However, the key ones arepension, children, group and capital guarantee plans. The Pension Plans come with two variations with and without life cover and are meantfor people who want to generate returns for their sunset years.

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The Children Plans, on the other hand, are aimed at taking care of their educational and otherneeds.

Apart from unit-linked plans for individuals, Group Unit Linked Plans are also available in themarket. The Group linked plans are basically designed for employers who want to offer certainbenefits for their employees such as gratuity, superannuation and leave encashment.

The other important category of ULIPs is Capital Guarantee Plans. The plan promises the policyholder that at least the premium paid will be returned at maturity. But the guaranteedamount is payable only when the policys maturity value is below the total premium paid by theindividual till maturity.

However, the guarantee is not provided on the actual premium paid but only on that portion ofthe premium that is net of expenses (mortality, sales and marketing, administration).

USP of ULIPS:
Insurance cover plus savings:

ULIPs serve the purpose of providing life insurance combined with savings at marketlinkedreturns. To that extent, ULIPS can be termed as a two-in-one plan in terms of giving anindividual the twin benefits of life insurance plus savings.

Multiple investment options: ULIPS offer a lot more variety than traditional life insurance plans. So there are multipleoptions at the individuals disposal. ULIPS generally come in three broad variants. Aggressive ULIPS (which can typically invest 80%-100% in equities, balance in debt) Balanced ULIPS (can typically invest around 40%-60% in equities) Conservative ULIPS (can typically invest up to 20% in equities) Although this is how the ULIP options are generally designed, the exact debt/equityallocations may vary across insurance companies. Individuals can opt for a variant based ontheir risk profile.

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Flexibility:

The flexibility with which individuals can switch between the ULIP variants to capitalize oninvestment opportunities across the equity and debt markets is what distinguishes it from otherinstruments. Some insurance companies allow a certain number of free switches. Switchingalso helps individuals on another front. They can shift from an Aggressive to a Balanced or aConservative ULIP as they approach retirement. This is a reflection of the change in their riskappetite as they grow older.

Works like an SIP:

Rupee cost-averaging is another important benefit associated with ULIPs. With an SIP,individuals invest their monies regularly over time intervals of a month/quarter and dont have toworry about timing the stock markets.

Hurdles of ULIP:

No Standardization:

All the costs are levied in ways that do not lend to standardization. If one company calculatesadministration cost by a formula, another levies a flat rate. If one company allows a range of thesum assured (SA), another allows only a multiple of the premium. There was also the problem ofa varying cost structure with age

Lack of Flexibility in Life Cover:

ULIP is known to be more flexible in nature than the traditional plans and, on most counts, theyare. However, some insurance companies do not allow the individual to fix the life cover that heneeds. These rely on a multiplier that is fixed by the insurer

Overstating the Yield:

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Insurance companies work on illustrations. They are allowed to show you how much your annualpremium will be worth if it grew at 10 per cent per annum. But there are costs, so each companyalso gives a post-cost return at the 10per cent illustration, calling it the yield. Some companieswere not including the mortality cost while calculating the yield. This amounts to overstating theyield.

Internally Made Sales Illustration:

During the process of collecting information, it was found that the sales benefit illustrationshown was not conforming to the Insurance Regulatory and Development Authority (IRDA)format. In many locations30 per cent return illustrations are still rampant

Not All Show the Benchmark Return:

To talk about returns without pegging them to a benchmark is misleading the customer. Thoughmost companies use Sensex, BSE 100 or the Nifty as the benchmark, or the measuring rod ofperformance, some companies are not using any benchmark at all.

Early Exit Options:

The ULIP product works over the long term. The earlier the exit, the worse off is the investorsince he ends up redeeming a high-front-load product and is then encouraged to move intoanother higher cost product at that stage. An early exit also takes away the benefit ofcompounding from insured.

Creeping Costs:

Since the investors are now more aware than before and have begun to ask for costs, somecompanies have found a way to answer that without disclosing too much. People are now askinghow much of the premium will go to work. There are plans that are able to say 92 per cent willbe invested, that is, will have a front load of just 8 per cent. What they do not say is the muchhigher policy administration cost that is tucked away inside (adjusted from the fund value).Whilemost insurance companies charge an annual fee of about Rs 600 as

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administration costs, that stayfixed over time, there are plans that charge this amount, but it grows by as much as 5 per cent ayear over time. There are others that charge a multiple of this amount and that too grows. Are Investment Returns Guaranteed in a ULIP? Investment returns from ULIP may not be guaranteed. In unit linked products/policies, theinvestment risk in investment portfolio is borne by the policy holder. Depending upon theperformance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses onhis/her investments. It should also be noted that the past returns of a fund are not necessarilyindicative of the future performance of the fund.

Charges, fees and deductions in a ULIP:

ULIPs offered by different insurers have varying charge structures. Broadly, the different typesof fees and charges are given below. However it may be noted that insurers have the right torevise fees and charges over a period of time.

Premium Allocation Charge:

This is a percentage of the premium appropriated towards charges before allocating the unitsunder the policy. This charge normally includes initial and renewal expenses apart fromcommission expenses.

Mortality Charges:

These are charges to provide for the cost of insurance coverage under the plan. Mortalitycharges depend on number of factors such as age, amount of coverage, state of health etc.

Fund Management Fees:

These are fees levied for management of the fund(s) and are deducted before arriving at theNet Asset Value (NAV).

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Policy/ Administration Charges: These are the fees for administration of the plan and levied by cancellation of units. This couldbe flat throughout the policy term or vary at a per-determined rate. Surrender Charges: A surrender charge may be deducted for premature partial or full encashment of units whereverapplicable, as mentioned in the policy conditions.

Fund Switching Charge: Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge.

Service Tax Deductions: Before allotment of the units the applicable service tax is deducted from the risk portion of thepremium.

Can one seek refund of premiums if not satisfied with the policy, after purchasing it? The policyholder can seek refund of premiums if he disagrees with the terms and conditions ofthe policy, within 15 days of receipt of the policy document (Free Look period). Thepolicyholder shall be refunded the fund value including charges levied through cancellation ofunits subject to deduction of expenses towards medical examination, stamp duty andproportionate risk premium for the period of cover.

What should one verify before signing the proposal? One has to verify the approved sales brochure for oAll the charges deductible under the policy oPayment on premature surrender oFeatures and benefits oLimitations and exclusions oLapsation and its consequences oOther disclosures oIllustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance council.

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What happens if payment of premiums is discontinued? a) Discontinuance within three years of commencement If all the premiums have not been paid for at least three consecutive years from inception, theinsurance cover shall cease immediately. Insurers may give an opportunity for revival within theperiod allowed; if the policy is not revived within that period, surrender value shall be paid at theend of third policy anniversary or at the end of the period allowed for revival, whichever is later. b) Discontinuance after three years of commencement At the end of the period allowed for revival, the contract shall be terminated by paying thesurrender value. The insurer may offer to continue the insurance cover, if so opted for by thepolicy holder, levying appropriate charges until the fund value is not less than one full yearspremium. When the fund value reaches an amount equivalent to one full years premium, thecontract shall be terminated by paying the fund value.

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ULIPs vs. Mutual Funds

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Comparison between ULIPS and Mutual Funds:

Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to Mutual Funds in terms of their structure and functioning. As is the cases with Mutual Funds,investors in ULIPs are allotted units by the insurance company and a net asset value(NAV) is declared for the same on a daily basis. Similarly ULIP investors have the option of investing across various schemes similar to the onesfound in the Mutual Funds domain, i.e. diversified equity funds, balanced funds and debt fundsto name a few. Generally speaking, ULIPs can be termed as Mutual Fund schemes with aninsurance component. However it should not be construed that barring the insurance element there is nothing differentiating Mutual Funds from ULIPs.

Points of difference between the two:

1. Mode of investment/ investment amounts Mutual Fund investors have the option of either making lump sum investments or investing usingthe systematic investment plan (SIP) route which entails commitments over longer time horizons. The minimum investment amounts are laid out by the fund house.

ULIP investors also have the choice of investing in a lump sum (single premium) or using the conventional route, i.e. making premium payments on an annual, half-yearly, quarterly or monthly basis. In ULIPs, determining the premium paid is often the starting point for the investment activity.

This is in stark contrast to conventional insurance plans where the sum assured is the starting point and premiums to be paid are determined thereafter.

ULIP investors also have the flexibility to alter the premium amounts during the policy's tenure.For example an individual with access to surplus funds can enhance the contribution therebyensuring that his surplus funds are gainfully invested; conversely an individual faced with aliquidity crunch has the option of paying a lower amount (the difference being

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djustedin theaccumulated value of his ULIP). The freedom to modify premium payments at onesconvenience clearly gives ULIP investors an edge over their Mutual Fund counterparts.

2. Expenses In Mutual Fund investments, expenses charged for various activities like fund management, salesand marketing, administration among others are subject to per-determined upper limits asprescribed by the Securities and Exchange Board of India. For example equity-oriented funds can charge their investors a maximum of2.5% per annum on arecurring basis for all their expenses; any expense above the prescribed limit is borne by the fundhouse and not the investors. Similarly funds also charge their investors entry and exit loads (inmost cases, either is applicable). Entry loads are charged at the timing of making an investmentwhile the exit load is charged at the time of sale.

Insurance companies have a free hand in levying expenses on their ULIP products with no upperlimits being prescribed by the regulator, i.e. the Insurance Regulatory and DevelopmentAuthority. This explains the complex and at times 'unwieldy' expense structures on ULIPofferings. The only restraint placed is that insurers are required to notify the regulator of all theexpenses that will be charged on their ULIP offerings.

Expenses can have far-reaching consequences on investors since higher expenses translate intolower amounts being invested and a smaller corpus being accumulated. ULIP-related expenseshave been dealt with in detail in the article "Understanding ULIP expenses".

3. Portfolio disclosure Mutual Fund houses are required to statutorily declare their portfolios on a quarterly basis, albeitmost fund houses do so on a monthly basis. Investors get the opportunity to see where theirmonies are being invested and how they have been managed by studying the portfolio.

There is lack of consensus on whether ULIPs are required to disclose their portfolios. During ourinteractions with leading insurers we came across divergent views on this issue.

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While one school of thought believes that disclosing portfolios on a quarterly basis is mandatory,the other believes that there is no legal obligation to do so and that insurers are required todisclose their portfolios only on demand. Some insurance companies do declare their portfolios on a monthly/quarterly basis.

However the lack of transparency in ULIP investments could be a cause for concern consideringthat the amount invested in insurance policies is essentially meant to provide for contingenciesand for long-term needs like retirement; regular portfolio disclosures on the other hand canenable investors to make timely investment decisions.

4. Flexibility in altering the asset allocation As was stated earlier, offerings in both the Mutual Funds segment and ULIPs segment are largelycomparable. For example plans that invest their entire corpus in equities (diversified equityfunds), a 60:40 allotment in equity and debt instruments (balanced funds) and those investingonly in debt instruments (debt funds) can be found in both ULIPs and Mutual Funds.

If a Mutual Fund investor in a diversified equity fund wishes to shift his corpus into a debt fromthe same fund house, he could have to bear an exit load and/or entry load.

On the other hand most insurance companies permit their ULIP inventors to shift investments across various plans/asset classes either at a nominal or no cost (usually, a couple of switches areallowed free of charge every year and a cost has to be borne for additional switches).

Effectively the ULIP investor is given the option to invest across asset classes as per his convenience in a cost-effective manner.

This can prove to be very useful for investors, for example in a bull market when the ULIP investor's equity component has appreciated, he can book profits by simply transferring the requisite amount to a debt-oriented plan.

5. Tax benefits ULIP investments qualify for deductions under Section 80C of the Income Tax Act. This holdswell, irrespective of the nature of the plan chosen by the investor. On the other hand in

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theMutual Funds domain, only investments I-Tax-saving funds (also referred to as equitylinkedsavings schemes) are eligible for Section 80C benefits.

Maturity proceeds from ULIPs are tax free. In case of equity-oriented funds (For example diversified equity funds, balanced funds), if the investments are held for a period over 12 months, the gains are tax free; conversely investments sold within a 12-month period attract short-term capital gains tax @ 10%.

Similarly, debt-oriented funds attract a long-term capital gains tax @ 10%, while a short-term capital gain is taxed at the investor's marginal tax rate. Despite the seemingly similar structuresevidently both Mutual Funds and ULIPs have their unique set of advantages to offer. As always,it is vital for investors to be aware of the nuances in both offerings and make informed decisions.

Facts to Be Considered Before Investing In ULIPS:

The high returns (above 20 per cent) are definitely not sustainable over along term, as they have been generated during the biggest Bull Run in recent stock market history.

The free hand given to ULIPs might prove risky if the timing of exit happens to coincide with abearish market phase, because of the inherently high equity component of these schemes.

While a debt-oriented ULIP scheme might be superior to a debt option in a conventional MutualFund due to tax concessions that insurance companies enjoy, such tax incentives may not last.

Look beyond NAVs: The appreciations in the net asset value (NAV) of ULIPs barely indicate the actual returns earnedon your investment. The various charges on your policy are deducted either directly frompremiums before investing in units or collected on a monthly basis by knocking off units. Either way, the charges do not affect the NAV; but the number of units in your account suffers.You might have access to daily NAVs but your real returns may be substantially

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lower. A roughcalculation shows that if our investments earn a 12 per cent annualized return over a 20-yearperiod in a growth fund, when measured by the change in NAV, the real pretax returns mightbe only 9 per cent. The shorter the term, the lower the real returns.

How charges dent returns: An initial allocation charge is deducted from our premiums for selling, marketing and broker commissions. These charges could be as high as 65per cent of the first year premiums. Premiumallocation charges are usually very high (5-65 per cent) in the first couple of years, but taper offlater. The high initial charges mainly go towards funding agent commissions, which could be ashigh as 40 per cent of the initial premium as per IRDA (InsuranceRegulatory and DevelopmentAuthority) regulations.

The charges are higher for a linked plan than a non-linked plan, as the former require lot moreservicing than the latter, such as regular disclosure of investments, switches, re-direction ofpremiums, withdrawals, and so on.

Insurance companies have the discretion to structure their expenses structure whereas a MutualFund does not have that luxury. The expense ratios in their case cannot exceed 2.5 per cent for anequity plan and 2.25 per cent for a dept plan respectively. The lack of regulation on the expensefront works to the detriment of investors in ULIPs.

The front-loading of charges does have an impact on overall returns as we lose out on the compounding benefit. Insurance companies explain that charges get evened out over a long term.Thus we are forced to stay with the plan for a longer tenure to even out the effect of initialcharges as the shorter the tenure, the lower our real returns. If we want to withdraw from theplan, you lose out, as you will have to pay withdrawal charges up to a certain number of years.

In effect, when we lock in our money in a ULIP, despite the promise of flexibility and liquidity,we are stuck with one fund management style. This is all the more reason to look for anestablished track record before committing our hard-earned money.

Evaluate alternative options:

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As an investor we have to evaluate alternative options that give superior returns before considering ULIPs. Insurance companies argue that comparing ULIPs with Mutual Funds is likecomparing oranges with apples, as the objectives are different for both the products.

Most ULIPs give us the choice of a minimum investment cover so that we can direct maximumpremiums towards investments.

Both ULIPs and Mutual Funds target the same customers. If risk cover is your primary objective, pure insurance plans are less expensive. When we choose a Mutual Fund, we look foran established track record of three to five years of consistent returns across various marketcycles to judge a fund's performance.

It is early days for insurance companies on this score; investing substantially in linked plans might not be advisable at this juncture.

Try top-ups Insurance companies allow us to make lump-sum investments in excess of the regular premiums.These top-ups are charged at a much lower rate usually one to two per cent. The expensesincurred on a top-up including agent commissions are much lower than regular premiums.

Some companies also give a credit on top-ups. For instance, if you pay in Rs100 as a top up, the actual allocation to units will be Rs 101. If you keep the regular premiums tothe minimum and increase your top ups, you can save up on charges, enhancing returns in the long run.

Reduce life cover: The price of the life cover attached to a ULIP is higher than a normal term plan. Risk charges arecharged on a daily or monthly basis depending on the daily amount at risk. Rates are not lockedand are charged on a one-year renewal basis.

Our life cover charges would depend on the accumulation in your investment account. As

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accumulation increases, the amount at risk for the insurance company decreases. However, withincreasing age, the cost per Rs 1,000sum assured increases, effectively increasing your overallinsurance costs. A lower life cover could yield better returns.

Stay away from riders; Any riders, such as accident rider or critical illness rider, are also charged on a one-year renewalbasis. Opting for these riders with a plain insurance cover could provide better value for money. ULIP's as an investment is a very good vehicle for wealth creation, but wayUnit Linked Insurance schemes are sold by insurance company representatives and insurance advisers is not correct.

ULIP's usually have following charges built into it: a) Up-front Charges b) Mortality Charges (Charges for providing the risk cover for life) c) Administrative Charges d) Fund Management Charges

Mutual Funds have the following charges: a) Up-front charges (Marketing, Advertising, distributors fee etc.) b) Fund Management Charges (expenses for managing your fund)

A few aspects of investing in ULIPs versus Mutual Funds. Liquidity; ULIPs score low on liquidity. According to guidelines of the Insurance Regulatory andDevelopment Authority (IRDA), ULIPs have a minimum term of five years and a minimum lockin of three years. You can make partial withdrawals after three years. The surrender value of aULIP is low in the initial years, since the insurer deducts a large part of your premium asmarketing and distribution costs. ULIPs are essentially long-term products that make sense onlyif your time horizon is 10 to 20 years.

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Mutual Fund investments, on the other hand, can be redeemed at any time, barring ELSS (equitylinkedsavings schemes). Exit loads, if applicable, are generally for six months to a year in equityfunds. So Mutual Funds score substantially higher on liquidity.

Tax efficiency ULIPs are often pitched as tax-efficient, because your investment is eligible for exemption underSection 80C of the Income Tax Act (subject to a limit of Rs 1 lakh). But investments in ELSSschemes of Mutual Funds are also eligible for exemption under the same section .Besides thepremium, the maturity amount in ULIPs is also tax-free, irrespective of whether the investmentwas in a balanced or debt plan. So they do have an edge on Mutual Funds, as debt funds aretaxed at 10% without indexation benefits, and20% with indexation benefits. The point, though, isthat if you invest in a debt plan through a ULIP, despite its tax efficiency your post-tax returnswill below, because of high front-end costs. Debt MutualFunds dont charge such costs.

Expenses Insurance agents get high commissions for ULIPs, and they get them in the initial years, not staggered over the term. So the insurer recovers most charges from you in the initial years, as itrisks a loss if the policy lapses. Typically, insurers levy enormous selling charges, averagingmore than 20%of the first years premium, and dropping to 10% and 7.5% in subsequent years.(And this is after investors balked when charges were as high as 65 %) Compare this with Mutual Funds fees of 2.25% on entry, uniform for all schemes. Different ULIPs have varying charges, often not made clear to investors. For instance, an agent who sells you a ULIP may get 25% of your first years premium, 10% inthe second year, 7.5% in the third and fourth year and 5%thereafter. If your annual premium isRs 10,000 and the agents commission in the first year is 25%, it means only Rs 7,500 of yourmoney are invested in the first year. So even if the NAV of the fund rises, say 20%, that year,your portfolio would be worth only Rs 9,000much lower than the Rs 10,000 you paid. On theother hand, if you invest Rs 10,000 in an equity scheme with a2.25% entry load, Rs 225 isdeducted, and the rest is invested. If the schemes NAV rises 20%, your portfolio is worth Rs11,730.

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This shows howULIPs work out expensive for investors. Deduct the cost of a term policy from the Mutual Fundreturns, and youre still left with a sizable difference.

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Mutual Fund Vs ULIP in a Nut shell

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Review of the Literature:

In Orissa apart from Bajaj capital there is four more third Party broker Companies are there. Looking at the market share the LIC is the pioneer but in last few yearsthe private players have performed very well despite that the Performance of BajajCapital though satisfactory, but it is not the best. Because the other players aregiving a cut throatcompetition & grabbing a high chunk of the market share.

In order to decipher the reason behind this cause. At first I inquired myrespondents regarding its product line but no where they reflected it as a matter ofworry. As per their opinion Bajaj capital have a sound product line tackle thisproblem. Then I focused on the quality of service provided by Bajaj Capital,Similarly the ICs marked it to be satisfactory, when I asked for their feedback inthe questionnaire & through personal interview, many of them said that the peopleof Orissa have less knowledge regarding the products & service quality offered byBajaj Capital. In their view the problem might be lying with the promotionalstrategy of Field Force. So I decided to carry on a study to decipher thecompetitiveness of Promotional Strategy of Field Force of Bajaj Capital in Orissa.

Then I tried to gain as much as knowledge regarding the promotional strategybeing a vital tool for a companys success for this I searched for as much asinformation as I can & I went through many journals, books , Internet sources.The knowledge I have acquire & the problem with Bajaj Orissa in Orissa , inspiredto me carry on my survey to study the competitiveness of promotional strategy offield force of Bajaj Capital in Orissa.

The hypothesis taken behind this study is that the promotional strategy of field force of Bajaj Capital in Orissa is not Profound.

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Chapter-02

Company Profile

Bajaj Capital's Mission Statement The focus of our organization is to be the most useful, reliable and efficient provider of Financial Services. It is our continuous endeavor to be a trustworthy adviser to our clients, helping them achieve BCIBL financial goals.

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Bajaj Capital Ltd.

The Bajaj Capital Group is one of Indias premier Investment Advisory and FinancialPlanning companies. It is also SEBI- approved Category Merchant Bankers.

Bajaj Capital is among the pioneers of the investment advisory and financial planning industry inIndia. For over four decades, the Company has been serving Indian investors, and giving shapeto the vision of its founder-chairman, Mr. K.K. Bajaj.

It offers personalized Investment Advisory and Financial Planning services to individualinvestors, corporate houses, institutional investors, Non-Resident Indians (NRIs) and High Networth Clients, among others. As one of Indias largest distributors of financial products, we offer a wide range of investmentproducts such as Mutual Funds, life and general insurance, bonds, post office schemes, etc.offered by reputed public and private and government organizations.

Company Profile:
Bajaj Capital is one of Indias leading Financial Services companies offering Free Advice onInvestments, Insurance, Tax Saving, Retirement Planning, Financial Planning, Childrens FuturePlanning and other services. It also has a wide range of products and services for Corporate,High Net worth Individuals, and NRIs all under one roof.

At Bajaj Capital, it believes in dreaming big. Dreams inspire us to excel. They ignite hope andkindle in us the passion to stretch there limits. It also believes that nothing can or should stop usfrom realizing our dreams and financial constraints should be the last thing to stop anyone.

Four decades of excellence: For over four decades, we have been helping people realize BCIBL aspirations by helping themmake their wealth grow, and plan their financial lives. Today, Bajaj Capital is a one of thelargest financial planning and investment advisory companies in India, with a strong presence all over the country. It takes pride in serving our customers both individual and

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institutional, and is known for our strong professionalism and work ethics. Wide range of services: We offer a comprehensive range of services including financial planning and investment advice,and the entire gamut of financial instruments and investment products of almost all majorcompanies, both public and private. In addition, we also provide investment assistance byhelping you complete all the formalities, and help you keep regular track of your investments.

These services and products are delivered through our network of 134 Bajaj Capital InvestmentCenters located all over the country.

Bajaj Capital is also a SEBI- approved Category Merchant Banker. They raise resources for over1,000 top institutions and corporate houses every year, and offer specialized services to Non-Resident Indian (NRIs) and High Net worth Clients.

Key Personnel
Mr. K.K. Bajaj Chairman Mr. Rajiv Deep Bajaj Vice Chairman & Managing Director Mr. Sanjiv Bajaj Joint Managing Director Mr. Anil Chopra CEO & Director

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Introducing Bajaj Capital Insurance Broking Ltd (BCIBL)

By your side whenever you need us

Risks are unavoidable in personal life and in business, but can be managed by proper planning.

As a true partner, BCIBL promises to use their knowledge for customer benefit. Be it advice onthe right insurance products or looking after your rights and interests in case of a claim, with amission-well be by your side... whenever you need us.

That's exactly where they at Bajaj Capital Insurance Broking Ltd. step in. At BCIBL, an IRDA licensed "Composite Insurance Broker" bearing license number CB 042/02, they callit Risk Management. They help customers to identify the potential risks and pass some of themon to insurance companies. They are customers partners, who help them to identify and understand various risks, prioritizethem and eventually manage them.

As a broker, BCIBL do not offer customers just a single option but multiple options available,and help you select the most appropriate one.

Products:
They offer a wide range of Life and General Insurance products offered by the insurance companies that cover almost the entire spectrum of risks that individuals or your business mayface.

BCIBL offers a wide range of insurance packages including: Personal Lines o Auto o Home o Travel o Accident & Health

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Property Insurance o Fire and Special Peril o Marine o Machinery Breakdown o Electronic Equipment Insurance o Loss of Profits etc.

Liability Insurance o Commercial o General Liability o Product Liability

Workman's Compensation/ Employer's Liability Contingency Risks Event Cancellation Wedding Insurance All Risk for Mobiles, Computers and Laptops etc. Industrial All Risk and Project Insurance Specialty Products Professional Indemnity/Errors & Omissions (E&O) Directors and Officers Liability (D&O) Fidelity Guarantee Commercial Cyber Crime Insurance Credit Insurance Mutual Fund & Asset Protection

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Why consult BCIBL? As IRDA licensed Insurance Brokers, BCIBL are your representatives unlike anagent who represents an insurance company. At BCIBL, BCIBL consider it your right to receive independent, unbiased andprofessional advice. BCIBL enjoy the 'Preferred Insurance Broker' status with many of the Insurancecompanies. This, in essence, translates into a greater benefit for customers. In fact, BCIBL enjoy a transactional relationship with almost all the Insurancecompanies present in India. We are therefore proud to say that many companies have come up with insuranceproducts based on our feedback. We have a strong operational and servicing team, and an all-India reach. We also have the support of a strong IT infrastructure and responsive call centers.

As such, we are easily accessible.

Milestones:
Bajaj Capital has contributed to the growth of the Indian Capital Market at every step.

In 1965, BCIBL were the first to innovate the Companies Fixed Deposit. Today, BCIBL is playing an active role in the growth of the Indian Mutual Fund industry.

BCIBL is also working closely with private insurance companies to deepen India's insurance market. Here is a brief gist of BCIBLs journey through the years.

1964 Bajaj Capital sets up its first Investment Centre in New Delhi to guide individual investors on where, when and how to invest.

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India's first Mutual Fund, Unit Trust of India (UTI) is incorporated in the same year.

1965 Bajaj Capital is incorporated as a Company. In the same year, the company introduces an innovative financial instrument the Company Fixed Deposit. EIL Ltd. (Oberoi Hotels, then known as Associated Hotels of India Ltd.) becomes the first company to raise resources throughCompany Fixed Deposits.

1966 Bajaj Capital expands its product range to include all UTI schemes and Government saving schemes in addition to Company Fixed Deposits.

1969 Bajaj Capital manages its first Equity issue (through an associate company) of Grauer& WellsIndia Ltd.; right from drafting the prospectus to marketing the issue.

1975 Bajaj Capital starts offering 'need-based' investment advice to investors, which would later be known as 'Financial Planning' in the investment world.

1981 SAIL becomes the first government company to accept deposits, followed by IOC, BHEL, BPCL, HPCL and others; thus opening the floodgates for growth of retail investment market inIndia.

Bajaj Capital plays an active role in all the schemes as 'Principal Brokers.

1986 Public Sector Undertakings (PSUs) begin making public issues of bonds MTNL, NHPC, IRFCoffer a series of Bond Issues. Bajaj Capital is among the top ranks of resource mobilizes.

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1987 SBI leads the launch of Public Sector Mutual Funds in India. Bajaj Capital plays a significantrole in fund mobilization for all these players.

1991 SBI issues India Development Bonds for NRIs. Bajaj Capital becomes the top mobiliser with collections of over US $20 million.

1993 The first private sector Mutual Fund Kothari Pioneer is launched, followed by Birla and Alliancein the following years. Bajaj Capital plays an active role and is ranked among the top mobilisersfor all these schemes.

1995 IDBI and ICICI begin issuing their series of Bonds for retail investors. Bajaj Capital is the co-managerin all these offerings and consistently ranks among the top five mobilisers on an all-India basis.

1997 Private sector players lead the revival of Mutual Funds in India through Open-ended Debtschemes. Bajaj Capital consolidates its position as India's largest retail distributor of Mutual Funds

1999 Bajaj Capital begins marketing Life and General Insurance products of LIC and GIC (throughassociate firms) in anticipation of opening up of the Insurance Sector. Bajaj Capital achieves themilestone of becoming the top 'Pension Scheme' seller in India and launches marketing of GIC'sHealth Insurance schemes.

2000

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Bajaj Capital implements its vision of being a 'One-stop Financial Supermarket.' The Companyoffers all kinds of financial products, including the entire range of investment and insuranceproducts through its Investment Centers. Bajaj Capital offers 'full-service merchant banking'including structuring, management and marketing of Capital issues. Bajaj Capital reinvents'Financial Planning' in its international sense and upgrades its entire team of Investment Expertsinto Financial Planners.

2002 The Company focuses on creating investor awareness for Financial Planning and needbasedinvesting. To achieve this goal, the company introduced the International College of FinancialPlanning. The graduates of this institute become Certified Financial Planners (CFPs), a covetedprofessional qualification.

2004 Bajaj Capital obtains the All India Insurance Broking License. Simultaneously, a series of wealthcreation seminars are launched all over the country, making Bajaj Capital a household name.

2005 Bajaj Capital launches 360A Financial Planning, a software-based program aimed at encouraging scientific and holistic investing.

2007 Bajaj Capital launches Stock Broking and Depository (Demat) Services.

2008 Bajaj Capital launches Just Trade, an online Platform for investing in Equities, Mutual Funds, IPO's.

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Objectives of Bajaj Capital:

To serve their clients with utmost dedication and integrity so that they exceed theirexpectations and build enduring relationships. To offer unparalleled quality of service through complete knowledge of products,constant innovation in services and use of the latest technology. To always give honest and unbiased financial advice and earn their clients' everlastingtrust. To serve the community by educating individuals on the merits of Financial Planning andin turn help shape a financially strong society. To create value for all stake holders by ensuring profitable growth. To build an amicable environment that accords respect to every individual and permitstheir personal growth. To utilize the power of teamwork to function as a family and build a seamlessorganization.

The Significance of the Logo of Bajaj capital:

The logo depicts Lord Ganesha who is the source of all our values and ethics in business. The large ears of Lord Ganesha remind Bajaj Capital to hear more. They listen carefully toour clients to understand their needs. The weight of the trunk on the mouth symbolizes silence. Bajaj Capital works silently,without blowing their own trumpet. The long trunk symbolizes continuous exploration. Bajaj Capital explores all avenues toprovide the best investment opportunities for our clients. The heavy posture of Ganesha symbolizes stability. Bajaj Capital helps our clients toattain financial stability through wise investments.

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Lord Ganesha is known as the remover of obstacles and bestower of prosperity. BajajCapital emulates His example and tries their best to help our clients attain prosperity byproper financial planning.

The logo has a yellow background. Yellow is the color of gold, which symbolizes wealth.According to Vedic lore, it is also the color associated with Brihaspati, the guru andcounselor of the Gods. We offer our clients sage counsel to make their wealth grow.

The letters are in red. Red is the color rajas symbolizing power and incessant activity. Itsymbolizes our aggressive quest for your well-being and happiness. The white streak represents the trunk of Lord Ganesha. White is the color of satvaguna,and implies our selfless commitment to your life-long happiness.

Strengths of Bajaj Capital: Wide range of products and services 41 years experience as Investment Advisors and Financial Planners More than eight lakh satisfied clients all over India Countrywide network of 134 branches Over 12,000 NRI clients across the globe Personalized wealth management advice 24 x 7 online accessibility through www.bajajcapital.com Strong team of qualified and experienced professionals including CAs, MBAs, MBEs,CFPs, CSs, Insurance experts, Legal experts and others SEBI-Approved Category I Merchant Bankers Group Co BCIBL is an IRDA-licensed Direct Insurance Broker

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Chapter-03 Research

Research Methodology

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Research Methodology:
Objective of the Research:
To study about the Mutual Funds industry. To study the approach of investors towards Mutual Funds and ULIPs. To study the behavior of the investors whether they prefer Mutual Funds or ULIPS?

Scope of the research: Subject matter is related to the investors approach towards Mutual Funds and ULIPs. People of age between 20 to 65. Area limited to Cuttack &New Delhi.
Demographics include names, age, qualification, occupation, marital status and annualincome.

Achievements:
My On the Job Training has given me a good experience in learning how to sell a product, howto deal with the customers, how to generate leads, how to maintain relation with the existingcustomers, how to get the references from the existing customers, how maintain a goodrelationship with co-employees. I have learn the convincing and persuasive skills in my OJT.Initially I have faced some hurdles in the beginning of the project to get the leads, but later oncould coup with the problems and I could perform my task successfully.

Steps of Research Design:

Define the information needed: This first step states that what the information that is actually required is. Information in this casewe require is that what is the approach of investors while investing their money in Mutual Fundsand ULIPs. E.g. what do they consider while deciding as to invest in which of the two i.e.Mutual Funds or ULIPs. Also, it studies the extent to which the investors are aware of thevarious costs that one bears while making any investment. So, the information sought andinformation generated is only possible after defining the information needed.

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Design the research: A research design is a framework or blueprint for conducting the research project. It details theprocedures necessary for obtaining the information needed to solve research problems. In thisproject, the research design is explorative in nature.

Specify the scaling procedures: Scaling involves creating a continuum on which measured objects are located. Both nominal andinterval scales have been used for this purpose.

Construct and pretest a questionnaire: A questionnaire is a formalized set of questions for obtaining information from respondents.Where aspretestingreferstothe testing of the questionnaire on a small sample of problems.

Population: The general public who are investing money in Mutual Funds and ULIPs, both.

Sample Unit: Investors and non-investors.

Sample Size: This study involves 50 respondents.

Sampling Technique: The sample size has been taken by non-random convenience sampling technique

Data Collection: Data has been collected both from primary as well as secondary sources as described below:

Primary sources: Primary data was obtained through questionnaires filled by people and through direct communication with respondents in the form of Interview.

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Secondary sources: The secondary sources of data were taken from the various websites, books, journals reports,articles etc. This mainly provided information about the Mutual Fund and ULIPs industry inIndia.

Plan for data analysis: Analysis of data is planned with the help of mean, chi-square technique and analysis of variance.

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Chapter-04

Analysis & Interpretation

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Market Capitalization of Mutual Funds and ULIPs:

What do investors prefer? 1) Do you invest in Mutual Funds?

Interpretation: 62% of the people invest in mutual funds.

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2) If not, then what other option(s) do you prefer to invest?

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3) What is the mode of information that you use for insurance companies?

At 4 degree of freedom, df (4) =7.815, thus the calculated value is greater than the table value. Hence, H0 is rejected

Interpretation: It means that all the modes of information are not the same. Advertisement ismore popular

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4) In which sector do you prefer to invest your money?

At df(1), the table value is 3.841 which is greater than the calculated value. Hence, H0 is accepted.

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Interpretation: People prefer both the sectors equally.

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5) At which rate do you want your investment to grow?

Interpretation: 40% of the respondents want their investments to grow in a faster rate.

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6) Which factor do you consider before investing in Mutual Fund or ULIPs?

At DF (4), the table value is 9.488 which is less than the calculated value. Hence, H0 is rejected

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Interpretation: people prefer low risk as the most important factor before investing in MutualFunds or ULIPs. 7) Imagine that stock market drops immediately after you invest in it thenwhat will you do?

Interpretation: 26% of the respondents will wait and watch even if the share market drops.

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8) How often do you monitor your investment?

Interpretation: It shows that most of the people .i.e. 50% prefer monitoring their investmenton monthly basis. 20% of the people monitor their investment occasionally.

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9) What percentage of your income do you invest?

Interpretation: People invest around 6% of their income

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10) You would describe your financial situation as being:

Since The Calculated Value Is Lesser Than the Table Value at (.05) I.E 1.96, Ho is accepted.

Interpretation: The Financial Situation Is Moderately Stable.

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11) If in the near future if you ever plan to invest in your money in any of themutual fund company, which would be your choice?

Options

Frequency

Percentages

SBI Mutual Fund

14

HDFC Mutual Fund

16

Reliance Mutual Fund

14

28

ABN AMRO Mutual Fund

11

22

10 Others

20

50 Total

100

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Options

Frequency

ObservedExpected

(ObservedExpected)2

(ObservedExpected) /E

At df (4), the table value is 9.488 which is greater than the calculated value. Hence, H0 is accepted.

Interpretation: People mostly prefer all the brands equally for their future investments.

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12) Do you have any Idea about Bajaj Capital?

Interpretation: There are 64% of people are known about the Bajaj capital.

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13) Have you ever invested through Bajaj Capital?

Interpretation:People of Cuttack and New Delhi are pretty much interested to Invest through Bajaj Capital.

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14) Are you satisfied by the offerings & services provided by the Bajaj Capital?

Interpretation:There is a mix response from the respondents about the services provided by Bajaj Capital.

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15) In which Product of Bajaj Capital you have invested?

Note:Here one people have invested in more than one product.

Interpretation: Life Insurances And Mutual Funds Could Fetch More Investments. FollowedBy Fixed Deposit, General Insurance And Online Share Trading.

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Demographics:
58% of people belong to 25-35 age group and on the other hand only 17% of people age belongs to above 40 groups. 17% of the people are under graduate. 52% of the people are graduates, 31% of the people are post graduates. 55% of the people are married 45% of the people are unmarried. 31% of the people are having their own business. 31% of the people are salaried. 25% are professionals. 8% are housewives. 5% are retired. 24% of the people belong to below 1, 50,000 income group. 36% of the people belongs to1, 50,000 2, 50,000 income groups. 33% of the people belong to 2, 50,000 4, 00,000 income group. Only 7% of the people belong to above 4, 00,000 income group.

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Chapter-05

FINDINGS & Recommendations

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Findings:

Highest number of investors comes from the salaried class. Highest number of investors comes from the age group of 25- 35. Most of the people have been investing their money n the share marketbelongs to Rs.400000 and above income group. Mostly investors prefer monitoring their investment on monthly basis. Most of the people invest up to 6% of their annual income in mutual funds. Most of the people between the age group of 25 35 invest their money inshare market. Equity funds are the funds having both high risk and high return. Pure equity funds are volatile in nature. Growth equity funds are giving good return. Mid cap equity funds are also giving good return Sectorial equity funds have also high risk; high return and they can be volatile as the share market.

Though equity funds have risk, they are still giving better return and also the preference of the mutual fund holder.

In 2007 and 2008,diversified equity fund were the best preferences, but now it is the equity funds has the better market.

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Recommendations:
The performance of the mutual fund depends on the previous years Net AssetValue of the fund. All schemes are doing well. But the future is uncertain. So, theAMC (Asset under Management Companies) should take the following steps: The people do not want to take risk. The AMC should launch morediversified funds so that the risks become minimum. This will lure more andmore people to invest in mutual funds. The expectation of the people from the mutual funds is high. So, theportfolio of the fund should be prepared taking into consideration theexpectations of the people. Try to reduce fund charges, administration charges and other charges whichhelp to invest more funds in the security market and earn good returns. Different campaigns should be launched to educate people regarding mutualfunds. Companies should give regular dividends as it depicts profitability. Mutual funds should concentrate on differentiating the portfolio of their MFthan their competitors MF Companies should give handsome brokerage to brokers so that they getattracted towards distribution of the funds.

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CONCLUSION
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Conclusion
After the successfully completion of my summer internship I understood thatmarket research is an important aspects for a company through out the life cycle ofa particular product. It helps in knowing the changing taste, preference, life styleetc. of the consumer. During the training I found that Random Sampling method isa perfective market research technique. With reference to my research topic that is Market Capitalization of Mutual Fund & ULIPs. I found that, 43% of the respondents have responded with apositive note. But a major chunk of them i.e. 53% respondents opined it to be notsatisfactory. A mutual fund is the ideal investment vehicle for todays complex and modern financial scenario. Markets for equity shares, bonds and other fixes incomeinstruments, real estate, derivatives and other assets have become mature andinformation driven. Today each and every person is fully aware of every kind ofinvestment proposal.

Everybody wants to invest money, which entitled of low risk, high returns and easyredemption. In my opinion before investing in mutual funds, one should be fullyaware of each and everything.

At the same time ULIPs as an investment avenue is good for people who haveinterest in staying for a longer period of time, that is around 10 years and above. Also in the coming times, ULIPs will grow faster.

ULIPs are actually being publicized more and also the other traditional endowmentpolicies are becoming unattractive because of lower interest rate. It is good for people who were investing in ULIP policies of insurance companies as theirinvestments earn them a better return than the other policies.

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BIBLOGRAPHY

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Bibliography:
Books: Business Research Methods Zikmund William G. Research Methodology- Kothari C.R. Management research Methodology- Krishnaswamy K.N., SivakumarAppaIyer, Mathirajan M. Managerial Decision Modeling with spreadsheets BalakrishnanNagraj, Render Barry & Stair Ralph M. Summer Internship Simplified Prof. Mishra Anil Marketing Management- Kottler Philip Indian financial system Securities analysis &port folio management -Avadhhani.V.A

Websites: www.bajajcapital.com www.amfiindia.com www.mutualfundsindia.com www.principalindia.com www.investorsguide.com www.moneycontrol.com www.sbimf.com www.sebi.co.in www.reliancemf.com www.sebi.co.in www.google.com www.quickmba.com www.indiainfoline.com www.hindubusinessline.com www.wikipedia.com www.economictimes.com www.yahoo finance.com

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Magazine and Newspapers: Front Line Stock Market Book Dallas Street Journals Outlook Money Company Brochures & Presentations 4Ps Magazine The Times Of India The Economic Times

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